Coronavirus: What financial help is available to tenants?

As a landlord, you will know that a good tenant is worth their weight in gold. With the coronavirus crisis showing little sign of ending soon, it’s useful for landlords to understand more about how the Government’s financial assistance schemes might apply to their tenants.

We explain some of the financial assistance schemes available to those who are employed or self-employed.

Employed but currently not working

For those tenants who were employed on 28 February 2020 then this is officially called the Coronavirus Job Retention Scheme (CJRS). It allows employers to put staff who can’t work on ‘furlough’ – ie. on ‘hold’ – and the Government will cover 80% of their salary up to a maximum of £2,500 per month. Think of this like a job being put on standby. The idea is you go into sleeper mode during the crisis, and then when it’s over they can instantly restart things and get the economy running again. HMRC says the aim is to officially launch during the week commencing 20 April, with the first payments being made by the end of April.

Those tenants who are entitled to such payments should still be able to pay their rent on time considering that beyond the inevitable expenses, very little expenditure is likely to be incurred during the lockdown.

Self-employed

The Chancellor has announced a similar scheme for those self-employed to their furloughed employed counterparts. The maximum level of renumeration was pegged at £2,500 per month, but this came with a few more restrictions. The grant is only available to those who have submitted a self-assessment tax return for the tax year 2018-19 and have traded in 2019-20. In addition, trading profits must be no more than £50,000 and make up more than half of their total income for either:

  • the tax year 2018 to 2019
  • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

Taking into account the first payment from the Government will not be made until June, then consideration may need to be given to those tenants who are self-employed, with a rent deferment being the most suitable option.

Universal credit

If tenants are unable to access the aforementioned financial assistance schemes, then depending on their financial position then they may be able to claim for Universal Credit. Putting aside the current lengthy delay in applications being processed, Universal Credit has been modified to make it simpler to claim as certain restrictions have been removed ie. the higher earning threshold. Hopefully, this will allow those tenants that have fallen between the cracks in other financial assistance schemes to be able to claim Universal Credit.

For example, a tenant who is self-employed earning £51,000 per annum would not be eligible for the proposed self-employed assistance scheme, but may be able to claim for Universal Credit on condition that their savings were not above £16,000. In addition, it is possible once the claim has been accepted, that a tenant could apply for an emergency loan to be provided.

For those tenants entitled to Universal Credit who have just claimed, the landlord would need to consider offering a rent deferment until such a time the Universal Credit payments were up and running on a regular basis.

Local Council Hardship Fund

The Government has provided £500 million to local councils to assist them in extending the reach of their current hardship funds. Local councils have limited funds to help the most disadvantaged people in the local community and this new spurt of income will no doubt help those people who find themselves significantly disadvantaged by the current crisis.

If a tenant needs assistance, then they will need to contact the local housing department at the relevant council and apply for assistance through the discretionary housing payment fund. As the funds are limited, it would be prudent for any tenant in distress to get an application in as soon as possible.

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These are unprecedented times, and both landlords and tenants are facing significant challenges. If you have any questions, the lettings experts at Foxes can help. Email us at lettings@foxes.co.uk or call 01202 299600.

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